Abstract

This paper describes the income diversification patterns of households with a newborn child in Peru. Comparisons are made with what the literature shows for the overall population and with the income diversification patterns of households in the same communities but with no young child.

Our results show that there are clear differences between rural and urban households in terms of income diversification patterns and strategies, ie, the range and type of activities from which a household obtains its income. Furthermore, the type of diversification strategy is associated with household per capita income and a child wellbeing indicator - height-for-age z-score. We also found evidence that the presence of a young child appears to impact on diversification patterns and strategies, with less diversification in those households with a young child. Having a young child reduced the likelihood of the mother working, although this was only statistically significant in urban households.

Further examination of the data shows that, in urban areas, access to childcare facilities outside the home is associated with improved income-generating opportunities for mothers in households with young children, enhancing their potential income diversification strategies. In rural areas, we find that improving access to daycare facilities to increase mothers' income-generating opportunities needs to be complemented with other interventions aimed at increasing the asset base, especially maternal education.